Analysts say a December interest rate hike is now a "live" possibility after new data showing businesses more confident than at any time since 2002 and keener to hire than before the global financial crisis.
The National Australia Bank October business survey shows that businesses planning to take on workers outnumber those planning to let go of workers two to one, the best result since early 2008.
"Taken literally this suggests annual employment growth of 2 per cent," said UBS economist George Tharenou. "It adds weight to our view that the Reserve Bank will raise rates by a further 0.25 percentage points in December, although it's a close call."
This month's mid-year Budget review predicted employment growth of only one quarter of one per cent in this financial year...
...enough to hold the unemployment rate to 6.75 per cent.
But if businesses follow through on hiring plans reported to NAB the rate could peak much lower.
ANZ economist Shane Lee said much depended on the official employment figures due out Thursday.
At 5.7 per cent after falling from 5.8 per cent in August, if the rate fell further it would cast on the mid-year forecasts and lend weight to the results of the NAB survey.
"Any significant fall in the unemployment rate Thursday would ensure a December rate rise," said Mr Lee.
Westpac economist Andrew Hanlan said that if continued over coming months the NAB results implied the economy would grow "far quicker than forecast by either the government or the Reserve Bank".
"We are expecting economic growth to accelerate to around 4 per cent throughout next year. The Reserve Bank, which is a touch more upbeat than the government, is forecasting 3.25 per cent."
The NAB survey shows business confidence climbing a further 2 points to +16, the highest level since early 2002 with 17 per cent of firms surveyed planning to boost employment, swamping the 9 per cnet who plan to cut back.
Around 85 per cent of firms surveyed described their current trading conditions as either satisfactory or good, swamping the 15 per cent who described them as poor.
"There is no doubt that the result adds to the case for a rate hike in December," said CommSec economist Savanth Sebastian. "Despite the survey being taken in late October, businesses would have been well aware that a rate hike in November was on the cards, and yet were still optimistic about trading conditions."
NAB economist Alan Oster said he now expected three rate rises of 0.25 points each in December, February and March taking the cash rate from 3.5 to 4.25 per cent.
Published in today's SMH and Age
. Bloody hell - employment soars
. Things are looking better, why deny it?
. Looking for work? Expect to wait 10 weeks